Driver Group (LON:DRV) shares took a 10 percent hit in early Friday morning trading, after reporting disappointing annual figures.
The company, which specialises in construction and engineering services, saw an operating loss of £200,000 from profit of £1.2 million. Net borrowings at the end of the last financial year totalled £9.9 million, compared to £2.5 million previously.
An underlying pre-tax loss of ££0.4 million was reported in the year to 30 September 2016, contrasting revenues of £1.1 million the year before.
Despite the losses, revenue grew to £58.5 million from £48.0 million, following in the Asia Pacific, Middle East and Africa and across in Europe and the Americas. The results reflected previous guidance issued by the company on 14 September, and in light of the results the board has not advised a dividend for the year.
Chairman Steven Norris said in a statement: “The loss declared at the half year was clearly unacceptable. Significant change was needed to improve the prospects of the group and action needed to be taken decisively and effectively. While much remains to be done the changes implemented saw a new management team under Gordon Wilkinson take charge and introduce a radical overhaul of every part of our business resulting in a second half which demonstrated a marked improvement.”
As a result, Driver Group have announced intention to initiate a £8 million worth of fundraising fundraising via of 22.8 million shares in order to mitigate debt levels.
Chief executive Gordon Wilkinson commented: “The fundraising is intended to provide the necessary level of refinancing to normalise the capital structure of the business and provides a solid platform on which to effect the remainder of the board’s recovery plan.”
Moreover, despite the difficult set of results, Chairman Mr Norris remained positive for the company’s future economic outlook. He added:
While it is always difficult to predict volumes in a professional services business such as ours your Board is confident that the company will continue to take out unnecessary costs, improve margins and refine our areas of operation both geographically and intellectually.
Mr Norris also encouraged investors and employees to look upon the future prospects of the company with “renewed confidence”.
“With this strategy of increasing our concentration on the higher margin claims and disputes markets now so clearly articulated and once the financial structure of the business is again back on a solid base following the equity raise now in process, I believe that shareholders, staff and other stakeholders can look forward to the future with renewed confidence”, he continued.
Shares in Driver PLC are currently down 14.89 percent as of 11.29AM (GMT).